Managing global brands: consumers' attitude to global brands

Another interesting article on the subject of global brands is posted on the Harvard Business School’s Working Knowledge web site. Its title is “How Consumers Value Global Brands” and it is based on a research project conducted by Douglas B. Holt, John A. Quelch, and Earl L. Taylor. The two part survey first tried to identify the key characteristics that people (from 41 countries) associated with global brands, and then measure the relative importance of the identified factors and how they affect consumers’ purchasing decisions.

What attracts consumers around the world to global brands? According to the study global brands are associated with:

1. Quality. A common perception is that global brands may be more expensive, but they guarantee quality. Also, it is widely believed that global brands are more dynamic and technologically advanced as a direct result of fierce rivalries among transnational companies. It is worth noting that certain attributes (such as German precision, Japanese quality, etc.) used to be associated with national brand; increasingly, though, consumers view global companies and global brands as having excelled in quality.
2. Global myth. A global brand equates to global thinking and global ideas. Buying a global brand makes one feel a citizen of the world.
3. Social responsibility. People all over the world tend to patronize those transnational companies who demonstrate commitment to social and environmental issues. The reverse is also true: consumers may be forgiving to a local company’s less than just treatment of workers, under par environmental track, but they expect nothing less than stellar social and environmental records from a multinational business. Recent memories of Nike’s boycott because of sweatshops, Union Carbide's woes because of the Bhopal explosion etc. demonstrate the trend. Raj will cover the subject in detail.

An interesting additional observation was made during the survey: international consumers may be quite vocal in expressing discontent with the American foreign policy, however, that does not lead to boycotting American products. The authors’ advise is that despite the growth of anti-Americaln sentiments in the world, “merican companies should manage brands just as rivals from other countries do.”

The full text of the article can be found on the HBS Working Knowledge site.